No money down, land collateral, etc. - Posted by Michael Morrongiello
Posted by Michael Morrongiello on April 22, 2006 at 17:51:56:
Let me make sure I (and others) get this right. You are selling a river front land lot that has an “Actual value at $15K…” for an inflated sales price of $20K to a buyer who is not puttting any cash to speak of down as a down payment and also has a “not so glowing credit” and you intend to finance this $20K sale by taking back (2) two Notes and Mortgages. There are not a whole lot of positives here don’t you think?
The repayment terms of the (2) two mortgages are:
A $10K 1st lien Mortgage @ 8% to be fully amortized over 84 months and payable $155.86 P & I monthly. This is the mortgage you would like to sell?
You will also carry a 2nd lien Mortgage Note for $10K to be amortized over 180 months @8% payable $95.57 P & I per month with a future balloon payment due.
With no track record of payments paid on EITHER of the seller carry back Notes, its doubtful an astute investor will invest more than between $6K to $7K cash for the purchase of the 1st lien Mortgage Note under these circumnstances. There is simply a tremendous amount of RISK associated with the unproven performance of how this borrower will do in making their payments.
My .02 cents…
Best to your success,